Exclusive: Exxon eyes Egypt's offshore oil and gas - sources

FILE
PHOTO: A view of the Exxon Mobil refinery in Baytown,
TexasThomson
Reuters

By Ron Bousso and Ernest Scheyder

LONDON/VIENNA (Reuters) - Exxon Mobil is considering a foray into
Egypt offshore oil and gas, seeking to replicate rivals' success
in the country and boost its reserves, officials and industry
sources said.

"We have been discussing with them, visiting them. They've
visited us... We are exploring all opportunities for having more
and further upstreamers in Egypt," Molla said on the sidelines of
an OPEC meeting in Vienna.

"I would be happy to have them with us," he said, adding that no
decision has been made yet.

Exxon declined to comment. The Irving, Texas-based company
currently has no upstream operations in Egypt, according to its
website.

The company is looking at exploring the eastern Mediterranean
offshore basin, according to industry sources.

Italy's Eni this month is set to begin producing gas from the
Zohr field in the Mediterranean, among the biggest discoveries of
the past decade.

"After Zohr there was a reassessment of the portfolio
profitability in Egypt" by Exxon, one source said, adding that
Exxon was looking for "tier one assets" with significant
potential.

Exxon is also considering opportunities in the Red Sea, where
Cairo is preparing to tender exploration blocks, industry sources
briefed on the matter told Reuters.

Egypt in 2016 had reserves of 3.5 billion barrels of oil and 1.8
trillion cubic meters of gas, according to BP's Statistical
Review of World Energy.

RESERVES

Egypt has recently ramped up efforts to attract foreign
investment in its oil sector to boost its struggling economy.

Along with Eni, BP and Royal Dutch Shell also have significant
operations in Egypt in offshore gas production, which is consumed
domestically although Cairo aims to become a gas exporter.

Exxon like many rivals has curbed spending to ride out a sharp
fall in oil prices in mid-2014.

With its reserves slipping, Exxon CEO Darren Woods, who took over
at the beginning of the year, has gone shopping.

Woods has spent or authorized more than $10 billion in investment
in the Permian Basin, the largest U.S. oilfield, and in offshore
Guyana.

In November, Exxon and Japan's Inpex Corp signed an agreement
with the Abu Dhabi National Oil Co (ADNOC) to boost the capacity
of the Upper Zakum offshore oilfield, the world's fourth largest.

Exxon is also close to signing a deal to explore for oil and gas
off Mauritania, its oil, energy and mines director said on
Wednesday.

In 2016, Exxon's stockpile of total proved oil reserves fell 4
percent to 7.75 billion barrels. In addition, the oil in its
portfolio is in hard-to-reach or expensive places, including
Russia and Canada.

By comparison, rival Chevron Corp has been able to boost its
proved oil reserves by about 1 percent since 2014 by expanding in
the Permian Basin and Kazakhstan.

Exxon's oil production up to the end of the third quarter stood
at 3.9 million barrels of oil equivalent per day, down about 6
percent from the end of 2016.